Apple investors finally have a roadmap for how the company will use and deploy artificial intelligence — and they’ve responded by pushing the stock toward its best week in more than two years.
Ryan Vlastelica and Carmen Reinicke for Bloomberg News:
Wall Street is betting that new iPhone AI features — including Apple’s agreement with OpenAI to integrate ChatGPT — will spur a massive upgrade cycle among users who have been holding on to older devices.
Investors have “more confidence that Apple is back in the game, that it has caught up competitively, and that it will see a re-acceleration of growth, given the installed base of phones that will need to upgrade to take advantage of this new tech,” said Jim Awad, senior managing director at Clearstead Advisors. “Apple will be a major beneficiary of AI, and the stock is catching up.”
Wall Street’s top stocks have quickly re-shuffled on AI optimism. Apple on Thursday overtook Microsoft Corp. as the biggest company by market capitalization. Apple was third-largest as recently as Monday, trailing behind $3.2 trillion Nvidia Corp, and Microsoft, which held pole position since January.
The iPhone maker is set for its biggest one-week percentage gain since 2021, climbing to a fresh record high. Since an April trough, the stock has added more than $700 billion in market value. Buy ratings on the stock are near the most since 2017.
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MacDailyNews Take: Because Apple Intelligence is limited to iPhone 15 Pro, iPhone 15 pro Max, and later, it very well could trigger a multiyear supercycle.
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I think once the features are actually available to customers, it’ll cause a phone super cycle. But I think the analysts claiming (and raising share price projections based on) there will be an iPhone 16 super cycle might be off by a model year. I just downloaded the developer betas for iOS and macOS and there’s no sign of any AI capabilities. My interpretation is that those features are so immature that Apple does not even want to share them via a developer build yet. But the simple reality is that Apple will release iOS 18 and macOS 15 come September – and, based on the AI features not being available for testing yet, I doubt those AI features will make it into the September release.
Think about it – in addition to adding these capabilities on-device in iOS, Apple needs to put in place AND TEST their entire Cloud Compute infrastructure as well as integration with OpenAI.
I’m thinking that iPhone super cycle won’t happen until iPhone 17.
While I agree that these features are definitely still heavily undercooked, the idea that AI features won’t be available at the initial iOS18 release in several months is off the wall. It would tank the stock back to where it was before WWDC. Perhaps not all but much of what was presented MUST be available at launch.